Pence says he would decline to set up state-level health insurance exchange

INDIANAPOLIS - Republican U.S. Rep. Mike Pence said Tuesday that if he is elected governor, Indiana will decline the chance to set up its own health insurance exchange and instead leave that task to the federal government.

He was the first candidate in the governor's race to stake out a position on how Indiana should implement President Barack Obama's health care law. He outlined his stance in a letter to Gov. Mitch Daniels.

"I believe Indiana should take no part in this deeply flawed health care bureaucracy," Pence said Tuesday.

Pence, Democratic former Indiana House Speaker John Gregg and Libertarian Rupert Boneham are all expected to lay out their positions for Daniels. He asked for their input because Indiana has to tell federal officials whether it will set up its own exchange by Nov. 16 – after the elections but before the next governor takes office.

"Operating our own exchange might seem like a way around the health care law's onerous regulations right now, but the way the regulations are written, the federal government will be hyper-regulating state-based exchanges," Pence wrote to Daniels.

"This would reduce the state of Indiana to a branch office of the Department of Health and Human Services, and leave Indiana lawmakers to blame for the price increases that will occur and for market related decisions that are largely outside their control. All told, this is entirely too much regulatory uncertainty to justify moving forward at this time."

It's one of several key decisions that must be made. Others include the "benchmarks," or minimum levels of care that insurance plans offered in Indiana have to include, as well as whether Indiana should expand Medicaid to cover 500,000 more Hoosiers.

In his letter, Pence said Indiana should select benchmarks that require nothing more of insurance providers than what is already included in state law.

He did not say whether he believes Indiana should pursue the Medicaid expansion for which the federal government would foot 90 percent of the bill, but the state would still pay $2 billion over the first eight years, according to an actuary's report.

That decision could be made after the next governor takes office – and after the U.S. Department of Health and Human Services rules on whether the Healthy Indiana Plan, which has users pay small amounts into health savings accounts, can be the vehicle for that Medicaid expansion.

Pence said he sees the Healthy Indiana Plan as the starting point for further debates about how to implement the health care law.

The six-term congressman who opposed the health care law and has voted repeatedly for its repeal signaled his broad approach to its implementation: "In a word, Indiana should say ‘no' to implementing ObamaCare," he said.

The other candidates were not ready Tuesday to take positions, although Boneham's campaign said his is coming this week.

"We're putting the finishing touches on ours, and Rupert's response will be out Friday," Boneham campaign manager Evan McMahon said.

Gregg, meanwhile, is the only candidate who has not yet met with Daniels' staff for a briefing on the decisions Indiana must make.

"We will be meeting with the Daniels administration in the coming weeks. We will have more after the meeting," Gregg spokesman Daniel Altman said.